Bailey Scarano Blog

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Exemption Granted from Electronic Filing for Form 1042

Bailey Scarano Blog, Tax & Money Tips / By

The IRS granted a temporary electronic filing exemption for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. The exemption is automatic, so withholding agents do not need to file an electronic filing waiver request to use the exemption. Under the exemption: Withholding agents (both U.S. and foreign persons) are not required to file Forms 1042 electronically during calendar

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Warning Signs of Questionable Employee Retention Credit Claims

Bailey Scarano Blog, Tax & Money Tips / By

The IRS has issued a warning to small businesses regarding potential issues with Employee Retention Credit (ERC) claims as the March 22, 2024 deadline for the ERC Voluntary Disclosure Program approaches. Seven suspicious warning signs have been identified based on feedback from tax professionals and compliance personnel. These signs may indicate erroneous claims and could lead to IRS scrutiny. The ERC Voluntary Disclosure Program allows businesses to rectify incorrect claims by repaying just 80% of the amount claimed. Taxpayers who

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Auto Depreciation Caps and Lease Inclusion Amounts for 2024

Bailey Scarano Blog, Tax & Money Tips / By

For 2024, the IRS has set new depreciation limits for business-use luxury cars and specific lease inclusion amounts. For vehicles placed in service or leased in 2024, there are distinct caps on depreciation deductions, aimed at managing the cost recovery of high-value vehicles. Vehicles exceeding a certain weight are exempt from these restrictions, encouraging the

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IRS Increases Audits on Personal Use of Business Aircraft

Bailey Scarano Blog, Tax & Money Tips / By

The IRS is expanding its ongoing efforts to improve tax compliance in high income categories with dozens of audits on personal use of business aircraft. Focused primarily on large corporations, large partnerships and other high income taxpayers, they will scrutinize the allocation between business and personal use to ensure accuracy. “During tax season, millions of

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New College Saving Opportunity: Converting 529 Plans to Roth IRAs

Bailey Scarano Blog / By

Saving for your children’s college education became much easier when 529 plans were introduced. The ability to access funds in a 529 plan without paying federal taxes, as long as the funds were used to cover qualified education expenses, make them appealing to parents of college-bound children. However, some found it difficult to determine how

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IRS Announces Penalty Relief for 2020 and 2021 Tax Returns and Plans to Resume Collection Notices

Bailey Scarano Blog / By

The Internal Revenue Service (IRS) has recently announced a significant update for taxpayers, providing much-needed relief for those affected by the COVID-19 pandemic. Specifically, the IRS is offering automatic penalty relief for taxpayers who failed to pay their income taxes for the tax years 2020 and 2021. This relief is part of the IRS’s efforts

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Navigating New IRS Regulations: Understanding De Minimis Error Safe Harbors

Bailey Scarano Blog / By

The IRS has recently finalized regulations that provide clarity and relief for businesses and individuals regarding the penalties for inaccuracies in information returns and payee statements. These final regulations, effective for documents required on or after January 1, 2024, solidify the IRS’s stance on de minimis error safe harbors under Code Sections 6721 and 6722,

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Audit stamped on 1040 form

IRS’s Aggressive Compliance Measures Bring in Over $500 Million from Millionaires

Bailey Scarano Blog / By

In a recent update that underscores the effectiveness of heightened compliance activities, the Internal Revenue Service (IRS) has made a significant impact on tax collection from high-net-worth individuals. Commissioner Daniel Werfel reported that, thanks to increased scrutiny on millionaires suspected of tax evasion, the IRS has successfully collected $482 million thus far. This announcement came

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What the 2024 IRS Focus Guide Means for Taxpayers in Disputes

Bailey Scarano Blog, Tax & Money Tips / By

The IRS Independent Office of Appeals has recently unveiled its 2024 Focus Guide, which could bring significant changes for anyone currently in a tax dispute or who might find themselves in one in the future. This guide, designed to align with the IRS’s Strategic Operating Plan, aims to enhance taxpayer services and provide a fair

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Understanding the Supreme Court Case on Taxing Unrealized Income

Bailey Scarano Blog, Tax & Money Tips / By

Recently, the Supreme Court of the United States took up a significant case, Charles G. Moore v. United States, that could impact how certain incomes are taxed. This is especially pertinent for those with investments in foreign companies. What’s the Case About? The case revolves around a change in the tax law from the 2017

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Important Update on 2024 Standard Mileage Rates and Deductions

Bailey Scarano Blog, Tax & Money Tips / By

The IRS has released its 2024 standard mileage rates for taxpayers who use their vehicles for business, medical, charitable purposes, and certain moving expenses. Understanding these changes is vital for optimizing your tax deductions in the upcoming year. 2024 Standard Mileage Rates Overview The IRS set the following standard mileage rates for 2024: Business Use:

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